Crude oil prices edged higher on Friday, putting an end to a four-day losing streak as investors continue to monitor the increasingly volatile situation between Israel and Iran.
According to Rystad Energy, a leading oil and gas research firm, the fragile standoff between the two nations could change at a moment’s notice, sending shockwaves through the global energy market.
So far, Israel has chosen to hold back from retaliating against Iran despite rising tensions and several reported provocations. However, experts warn that this restraint may not last, and any escalation would likely have significant consequences for the global economy.
The situation has been deteriorating rapidly in recent weeks, with both sides engaging in a war of words and proxy conflicts in various regions. The situation is made all the more complicated by the fact that both nations have powerful allies and a long history of animosity.
For now, investors appear to be adopting a wait-and-see approach, hoping that cooler heads will prevail and a full-scale conflict will be avoided. However, the mood is likely to remain tense, with any sign of further escalation likely to send oil prices soaring.
The oil price has been volatile in recent weeks, reacting to a mixture of factors including economic data, inventory levels, and geopolitics. The current price is still relatively high compared to historical norms, but significantly lower than the record highs seen last year.
Analysts say that the situation between Israel and Iran is just one of many factors influencing the oil price at the moment. Other significant factors include the ongoing conflict in Ukraine, growing concerns about the health of the global economy, and OPEC’s efforts to manage supply.
Despite the many challenges, some experts predict that the oil price will remain relatively stable in the short term, at least until the situation between Israel and Iran becomes clearer. However, others warn that the global economy is increasingly vulnerable to shocks, and any further escalation would likely have far-reaching consequences.